st: re: xtabond 2

1. Are 800 observations large enought to run xtabond2?
2. How can I deal with the warnings: relative large instruments than
the observations?

First of all, abdata (the classic dataset used by Arellano-Bond:
webuse abdata) has 1031 observations, and it is certainly large
enough. What matters more perhaps is the relative size of T and N.
The technique is suitable for large N, relatively small T (such as
single digits). It will work with larger T, but N should be much
larger than T.

To keep from generating 'too many' instruments, use the lags( )
option when specifying gmmstyle() instruments. And read through
Roodman's "How to do xtabond2" (you can find it on RePEc, http://
ideas.repec.org).